Stock valuation models are dependent upon
A) expected dividends, future dividend growth, and an appropriate discount rate.
B) past dividends, flotation costs, and bond yields.
C) historical dividends, historical growth, and an appropriate discount rate.
D) All of these options are true.

Question

Quizplus · Accepted Answer

Stock valuation models are typically based on projected future cash flows in the form of dividends or other return to investors. These models take into account expected dividends, future dividend growth, and an appropriate discount rate. Past dividends or growth rates may be considered as a part of this analysis, but they are not the only factor. Flotation costs and bond yields are relevant to other aspects of a company's financial management, such as financing decisions, but are not directly related to stock valuation.

Stock Valuation Models Are Dependent Upon